Nov. 10 (Bloomberg) -- Zinc and aluminum are the “ideal
candidates” for exchange-traded fund products backed by
physical metal, according to Peter Richardson, chief metals
economist at Morgan Stanley Australia Ltd. Richardson made the
comments in an interview with Bloomberg News yesterday.

“Zinc and aluminum are metals in structural oversupply.
They need time, either in terms of cumulative demand growth or
constraint in supply mechanisms, to bring about a better
fundamental market.

“We think both of them are going to be ideal candidates
because of the liquidity in the inventory, to do physically-backed ETFs, much more so than copper or nickel or tin because
the danger with those metals is where there’s tightness, term
structures will induce investors to sell rather than buy.”